Known -Unknown Vs. Unknown- Unknown
Known- Unknown are the events where you know about the forthcoming event ( most of the times ) but you are uncertain about the outcome i.e. Budget / Elections /Small scams / Interest rate changes .
Markets generally correct 8-10% and then start the previous trend .
These kind of events are regular ( happen every 1-3 years )
Unknown-Unknown Where events are not predictable, they are sudden ,you’re neither aware about the forthcoming event nor its outcome .i.e. Covid / sudden wars / big scams .
Markets may fall 30-40% and future trend may be different than the previous trend .
These kind of events happen every 8-10 years e.g. early 90s/ 2008 / 2020
Common people are unable to make this distinction and they tend to remember unknown - unknown events more as fall is greater & serious wealth destruction happens - that’s why they are not able to commit big money in the markets .
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